State Income Tax
: Flat rate of 3.07% State Sales Tax
: 6% Estate Tax/Inheritance Tax
Pennsylvania is one of only two states (Mississippi is the other) that exempts all retirement income -- including public and private pensions, IRAs and 401(k) distributions -- from its state income tax. Non-retirement income is taxed at a low, flat rate of 3.07%. Food, clothing and medicine are exempt from state sales taxes. But property taxes can be high in the Keystone State, especially near larger cities. One caveat for the wealthy: Your heirs won't get off so easily. Pennsylvania is one of a handful of states to have an inheritance tax, paid by the heirs.
(iStock) More From Kiplinger
: Kiplinger’s State-by-State Guide to Retiree Taxes 10 Things You Must Know About Social Security 12 Smart Year-End Tax Moves for 2012 The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.